A lawsuit involving over $300 million has been lodged against the Bank of Bermuda in the US but the Bank has dismissed the action as "full of factual inaccuracies''.

The new suit names the Bank of Bermuda as parent company and holds it, together with its two Cayman subsidiaries, as responsible for an alleged Ponzi scheme which saw investors lose an alleged $300 million.

The news is contained in the latest edition of Offshore Alert, the maverick business newsletter edited by David Marchant.

An earlier suit was filed this February by lawyers acting on behalf of the investors. This latest action was filed last month by the receiver for the failed venture.

Cash 4 Titles is the operation investors allege was nothing more than a racketeering scam run Michael Gause and Richard Horna, both of whom have been criminally indicted in connection with the case. Both the investors and the C4T receiver, Philip Stenger, claim the Bank of Bermuda actively promoted the scheme.

According to the most recent suit filed in the District Court for the Northern District of Illinois on September 19, officers of the Bank of Bermuda "participated in C4T sales meetings in Atlanta, Georgia, C4T's principal place of business, and hosted potential American and Canadian and other foreign investors at its Cayman Islands headquarters''.

But yesterday a Bank of Bermuda spokesperson denied the allegations.

"The claim filed against the Bank of Bermuda (Cayman) is full of factual inaccuracies and the Bank denies in the strongest possible terms any wrongdoing.

"The Bank intends to defend its position vigorously but with the pending litigation it would inappropriate to comment further.'' According to the two suits filed, the majority of the C4T operation took place in the Cayman Islands through the Bank of Bermuda's branch there. Bank of Bermuda (Cayman) and Bermuda Trust (Cayman) Ltd. were named in the September suit.

Both filings were lodged under the Racketeering Influenced and Corrupt Organizations Act, which allows for treble damages.

Like the original suit, the latest complaint says that bank officers told investors that they had "thoroughly researched and investigated'' C4T and its principals and "vouched for their integrity and legitimacy''.

Bank denies suit But money investors put in the scheme was allegedly used to finance new business ventures by the operation's principals, Gause and Horna, instead supporting the actual high interest loan business that was C4T.

These funds are alleged to have been redirected through the Bank of Bermuda (Cayman) as part of a multi-tier marketing system set up by Gause and Horna.

According to Offshore Alert, the names of offshore companies receiving incoming funds from investors started with the letter `I', and those firms handling outgoing payments began with the letter `O'.

Referring to the Bank of Bermuda as `BB', the Bank's Cayman subsidiaries as `BBCI' and the alleged Ponzi scheme as `GMTMS' for the Gause Multiple Tier Marketing Scheme, the complaint read: "Given its knowledge of the C4T operations, particularly its limited ability to employ capital in excess of US $1 million per year and the direct, lateral transfers within GMTMS, BB and/or BBCI had to have known that the tens of millions of dollars was being squandered in a Ponzi scheme.

"Nevertheless, BB and/or BBCI facilitated the transfers and continued their vouching and marketing on behalf of GMTMS.'' The complaint stipulates that the receiver, Mr. Stenger has made the filing as part of his efforts to repay the investors.